Why are hearing aid manufacturers are buying up retail clinics at an accelerating pace?
The answer? Because controlling the TPA isn’t enough. To secure permanent market dominance, manufacturers need the end-to-end pipeline — from the insurer’s benefit design, to the clinic floor, to the device in the patient’s ear.
In Part 2, we traced how manufacturer-owned TPAs tilt the playing field, funneling patients into closed benefit systems that primarily serve the manufacturer’s interests. But if you follow the money long enough, the story gets even more complicated — and, frankly, even more concerning.
This installment tackles the biggest, and most opaque, piece of the puzzle: manufacturer acquisition of clinics.
Hearing aid manufacturer retail expansion is such a complex piece of this closed loop system that one post would not do it justice.
We decided each manufacturer deserves their own post to explore trends and changes that ultimately affect the entire industry, but today’s post will provide a high-level view of the game at play.
To truly realize what is happening, we took a deep dive into the financial reports for major manufacturers for the last 7-years and identified emerging patterns. Analyzing these reports at a micro level, through the lens of our industry experts cuts through the BS to see what is really going on.
First, let’s dive into how and where the shift began.
Get ready, and pay attention.
A Perfect Storm
In 2020, while the world was focused on COVID, private practice owners were trying to keep their families safe, maintain business expenses and staffing, possibly homeschool their kids, and provide patient care, all while being considered a “non-essential” health care service. Oh, and did I mention, this is on top of already thin profit margins.
Meanwhile, a handful of foreign global manufacturers with enough money for a rainy day, saw an opportunity and seized it.
Several dynamics collided after COVID to create the perfect buying opportunity for global manufacturers:
Foreign parent companies with deep pockets
WSA, Sonova, and Amplifon are all headquartered outside the U.S. Each reports billions in annual revenue — WSA alone grew from €1.74B in FY 2019/20 to €2.64B in FY 2023/24 — and they deploy that capital strategically in the U.S. market.
Independent practices under pressure
Rising labor costs, increased product and shipping fees, and overhead, combined with shrinking reimbursements and capped TPA fitting fees, bled practices dry. Many clinics that once built the reputation of brands like Phonak, Widex, or Signia foud themselves struggling to break even.
A dual-front strategy
While squeezing margins through TPAs, manufacturers simultaneously offered acquisition lifelines to the very independents they destabilized. It’s no coincidence that Sonova bought Alpaca Audiology (~220 clinics) in 2021 for CHF 420m — right when many U.S. practices were reeling from the pandemic.
Why Retail Is Their Endgame
By owning both the benefit manager and the clinic, manufacturers ensure that:
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Patients are funneled into private-label devices at the lowest copay.
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Competitor devices are available — but with higher out-of-pocket costs, making them unattractive.
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Independents are forced into fixed fitting fees while carrying higher wholesale costs.
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When independents fold, manufacturers can buy them at a discount, expanding their retail footprint even further.
For them, this isn’t about patient choice. It’s about locking down the pipeline, from insurer → TPA → clinic → device → corporate balance sheet.
What can be learned from reviewing manufacturer annual reports?
Reviewing the annual report of each manufacturer in sequential order is telling. It affords the ability to see how their long term strategy pans out and how disruptions in the industry are handled. Ambiguous comments once overlooked or forgotten read differently a few years down the road.
After reviewing the annual reports for the major players in the hearing industry we uncovered a common theme. Here’s the cycle repeated in each annual report:
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Raise wholesale/device pricing and tack on shipping fees.
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Lower fitting fees through manufacturer-owned TPAs (e.g., TruHearing, Hearing Care Solutions, UHC Hearing).
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Watch independents get squeezed, while manufacturers grow Americas revenue share: WSA’s Americas jumped from 40% of global revenue in 2020/21 to over 50% by 2023/24.
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Sweep in with acquisitions at favorable valuations.
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WSA consolidated 28 brands into HearUSA and rolled up My Hearing Centers into its U.S. retail footprint.
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Sonova bolted on smaller chains after Alpaca, spending CHF ~80–100m annually on “bolt-on” acquisitions.
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Amplifon added ~1,000 points of sale in three years, topping 10,000 globally.
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But if retail isn’t profitable, why do manufacturers keep expanding? The answer lies in market share.
Are manufacturer-owned clinics profitable?
Retail losses don’t matter in this model. Amplifon admitted in 2022 that personnel costs at points of sale exceeded €463m, but still added 400 shops in a single year.
Why? Because market share is the goal. Retail can even be used as a tax offset while upstream profits flow from device manufacturing.
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A Conversation That Says It All
In 2024, I was speaking to the president of a major manufacturer about the struggles and reality private practices faced with TPAs. I asked if he knew what a leading TPA was charging for entry-level devices. He guessed they were being “given away.”
I confirmed he was right and began to tell him about the struggles and reality private practices faced with TPAs. I also told him that these “free” hearing aids were not the appropriate level of technology for the majority of the patients choosing them.
His response?
“I’ll deny it if you repeat this, but it’s about all about market share.”
Me? I wasn’t surprised by the answer. I was more surprised at his nonchalant voluntary response. That one sentence sums up the retail strategy better than any annual report ever could.
Behind Closed Doors
“... it's all about market share.”
Response from the president of a top manufacturer after discussing the inability to compete with "free" TPA devices.
What is the long-term game for manufacturer-owned clinics?
The long-term game isn’t profitability per clinic. It’s about cementing control over distribution. By the time independents fold, manufacturers have already captured device sales, insurer partnerships, and market mindshare. Retail is simply the final piece that locks the pipeline — ensuring they control the rules of access for years to come.
Three methods, one goal
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WSA: Owns TruHearing, Hearing Care Solutions, and Hear In America. Revenue surged 51% in five years while retail sites grew from ~900 → 1,124. Its latest report explicitly calls out U.S. managed care and retail as key growth engines.
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Sonova: The Alpaca Audiology deal (CHF 420m) plus steady bolt-on acquisitions added hundreds of U.S. sites. Goodwill consistently makes up more than half of purchase consideration, showing Sonova pays premiums for market share, not hard assets.
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Amplifon: The pure-play retailer. Added ~1,000 shops from 2020–2023, surpassing 10,000 globally. Retail isn’t necessarily profitable (high personnel and operating costs), but scale buys procurement leverage, insurer partnerships, and consumer mindshare.
Remember- Control the Device, Control the TPA, Control the Clinic, Control the Dollar.
Quick Takeaways
To sum up what we covered today:
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Retail isn’t about profitability. It’s about control.
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TPAs bleed independents, then manufacturers acquire them at favorable valuations.
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Foreign parent companies use retail as a foothold to dominate U.S. distribution.
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Every annual report — whether WSA, Sonova, or Amplifon — tells the same story: market share first, margins later.
The bottom line: retail isn’t about profit — it’s about power. By controlling devices, TPAs, and now clinics, manufacturers don’t just compete in the market, they own the market.
Stay tuned for next week where we take a deep dive into our first manufacturer, Sonova.
